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Update: On top of the previous report, Joystiq's sources claim Sega has stopped funding both the Aliens RPG and Aliens: Colonial Marines. Obsidian's layoffs are also said to have affected the team for Alpha Protocol, which Sega is publishing this year.

Original: Sega has reportedly cancelled the Aliens role-playing game that was being worked on at Knights of the Old Republic II and Alpha Protocol developer Obsidian.

The RPG was announced in 2006, but little has surfaced since. The cancellation resulted in more than 20 employees being laid off, according to Kotaku's sources.

Gearbox's Aliens: Colonial Marines

Sega is also said to be "reviewing" Gearbox's shooter Aliens: Colonial Marines, leaving its fate unclear. Rumors that the game was put on hold emerged amidst November layoffs at Gearbox, but the studio quickly stated that the game was not "canned."

The publisher announced a new Aliens game, Aliens vs. Predator, just yesterday. Sega said that AvP would arrive in 2010 before the other Aliens games under development, but did not specifically mention the Aliens RPG or Aliens: Colonial Marines by name.

Earlier this week, Sega vowed it would cut research and development costs by 20% after revising its financial projections to account for an expected loss of $236.9 million.